Points On Pokies

This is not a terribly coherent essay. It’s just a collection of stuff I’ve been commenting on Harry Clarke’s site. I’ve been arguing with Harry over gambling again, and the topic of pokies came up.

Since apparently “WA doesn’t have pokies”, and WA is so great because it doesn’t have pokies!!!!! Here are some facts about gambling in WA.
Firstly, about the machines themselves:

Burswood Casino has 523 video poker machines and mechanical slots. These are not the same as “pokies” (more correctly known as “Slot Machines” everywhere else in the world). Modern “Slot Machines” are machines that have a computer monitor that emulates the old style mechanical slot machine, where a series of wheels featuring different characters spin and then stop. Line the characters up in a certain way and you win money.

In comparison, “Video Poker Machines” are actually an emulation of playing a solo hand of 5-card Draw Poker, where the machine pays out depending on the strength of your hand. Jacks Or Better is a typical example, although there are others.

The key differences between the two different types of Video Gaming machines is the level of strategy required and the payout.

“Slot Machines” require virtually no strategy (usually you just put in your money and press GO! or pull the lever) and in Australia typically pay out at 90%.

Video Poker machines pay out better (98-99%) If you use the perfect strategy (which almost nobody does). Your average casual player would have no idea of the mathematically correct strategy for playing Jacks or Better, or that there even is one.

All in all I think your average moron would probably do better on the slots than on video poker, but I can’t support this claim in any way. Since I never watch how people play Video Poker at Burswood, I can’t say what the average level of skill is. However, if it’s anything like the average level of skill at Blackjack, then most people who play them would be lucky to know how to open their refrigerator door let alone memorise the correct strategy for Jacks or Better.

There are no-skill slot machines in pubs, in WA as we speak. The thing is that these machines are governed by some weird set of regulations of which I am not aware.

1. These machines can not pay out in coins. You insert your coin just like you would a normal Slot Machine, and the machine stores win credits like a normal machine, but when you win you are only able to receive a voucher which can be redeemed for cash at the bar.

I assume this is to stop the psychic addiction that is associated with hearing the lovely noise of coins jangling out of the machine when you win.

2. As far as I can tell from asking bar staff (not usually a reliable source on anything), all profit from these machines has to be donated to a non-profit organisation and cannot be added to general revenue for the drinking establishment.

This arrangement provides our cricket club with a 4-figure annual sponsorship deal from a local pub (or at least used to, I am not sure on the current status of this deal).

3. As far as I know these machines can be put in any pub, but not nightclubs. Nevertheless they are not that common, you really only see them in suburban pubs (otherwise known as Bogan Joints). Most pubs that have them only have between 1 and 4 machines rather than large banks of them.

People often claim that pokies are the lowest returning form of gambling there is. This is not true. Here is a general idea of the various types of gambling ranked by the percentage of bets returned to the punter. The % figure alongside is the typical house edge (assuming perfect play in those games (*) that require strategy):

Video Poker* (~0.5%)

Blackjack* (1%)

Baccarat (1%)

Pai Gow (1.5%)

Roullette- Single Zero (2.7%)

Two Up (3.1%)

Poker* (5%)

Carribean Stud Poker* (5.2%)

Roullette – Double Zero (5.3%)

Sports/Racing Bets with a bookmaker or TAB* (7.5%)

Craps – (10%)

Slot Machines (10%)

Keno (25%)

Lotto/State Lottery (30%+)

Poker and Sports/Track betting are unique in that if you know what you are doing you can make a long-term profit. In the case of Sports/Track betting you basically have to be a better handicapper than the bookie (fairly difficult which is why so few people make a living off this).

In the case of poker you have to be better than the other players on the table by a big enough margin to make up for the commission (rake) that the casino takes from each pot. At shitholes like Burswood, the rake is 5% which is basically unbeatable unless you are incredibly good or playing against complete idiots (not as rare as it sounds). Online poker sites have rakes closer to 2% or even less depending on the limit you play.

In terms of traditional (vs the house) games, the key point here is that the strategy for Video Poker and Carribean Stud poker is quite complex. I doubt many people know the perfect strategy so you can assume that the house edge is significantly higher as far as most casual gamblers are concerned. In comparison the perfect strategy for Blackjack is quite easy to learn, although most people still don’t know it.

The strategy for Baccarat seems hard but it’s really not – just bet on the banker all the time.

Personally when I go to the Casino (rarely), I only ever bet on Blackjack (if I am sober) or Two-Up (If I am drunk).

Two-up is a great game to play if you are drunk or just an idiot because a:) You only have to decide heads or tails and both choices give the same edge. b:) The edge is not that bad. c:) You can yell and abuse the ferals in the middle and not get thrown out of the Casino.

Blackjack is fine if you know basic strategy but I usually get sick of the morons who whine when you “steal the tens out of the deck”. The biggest advantage of blackjack is that you sit quite close to the dealer and they are often attractive.

Apart from that going to the casino is a huge waste of time and I can’t stand it.

As you can see from that list, Slot Machines are neither the best nor worst form of gambling in terms of return. A lot of the opposition to them is based on this fallacious argument.

The other main arguments used against pokies are:

Because they are so easy to play, it is easy to waste a lot of money on them very fast.

I really don’t understand this. It is also possible to waste a lot of money really fast by putting $5,000 on the nose of a 1000-1 shot at the dogs (Or on Carlton to win the AFL premiership or whatever).

In addition, if your main pokie spending is at the pub (in the eastern states), it is worth remembering that the money lost on the pokies is at least partially offset by the fact that you are drinking beer and eating food much more cheaply than you would be if there were no pokies.

The average price of a beer or a counter meal in Perth is around 30% higher than it is in Sydney or Melbourne. This is quite significant when you take into account the generally higher cost of living and rent in those cities.

Allowing for that disparity I would say that having pokies be legal reduces the cost of getting pissed by about 50% in comparitive terms.

WA – being the only place in Australia that doesn’t have pokies – is the most expensive place in Australia to get drunk.

I’ve gotten drunk in just about every major city in the developed world, and Perth compares quite unfavourably on a world scale. If you are drinking primarily pints of beer, Perth is about equivalent to going out on the piss in Tokyo, Hong Kong and New York City.

If you are drinking spirits or mixed drinks, Perth is cheaper than Hong Kong or Tokyo, but much more expensive than New York.

London, Singapore and Scandinavia are more expensive.

Everywhere else not mentioned is cheaper than Perth.

Of course this is not only because of the lack of pokies, but also because of WA’s generally draconian liquor licensing laws. It is also worth remembering that out of Tokyo, Hong Kong, New York and Perth, Perth is the only place that doesn’t allow pubs to open past 3am.

Pokies pushed out other forms of entertainment in pubs, like live music, quiz nights, topless barmaids or whatever.

On the face of it I think this is a fairly legitimate complaint. It is certainly much easier as a pub owner to just install a few banks of poker machines to bring in cash rather than go to the hassle of organising other, more social forms of entertainment.

However I think this is more a reflection of the attitudes towards customer service and marketing in the Australian service industry in general.

It’s no secret to anyone who has ever travelled that Australia’s customer service is the worst in the world. Australians seem to have a real aversion to being the subservient in any way, even if your job requires it.

This is reflected not only when you try to get a beer in a pub, but when you step onto the national airline carrier or even just ask for help in a shop.

It’s a big reason why a large percentage of barmaids/barmen in Australia are backpackers from other countries. Employers prefer them because they are much less likely to tell a customer to fuck off if they are in a bad mood.

This is also reflected at the ownership and management level. Australians in general will do anything that could lead to them having to deal with customers less. Having the customers quietly and regularly sticking their money in a machine instead of them asking you to do stuff that will require work is the ideal setup. It’s the adult equivalent of sticking your kids in front of the TV so you don’t have to hire a babysitter.

Australia’s restrictive liquor licensing laws don’t help this situation by restricting pub ownership to those who have the money and connections to get a license, rather than people who might actually have a passion for it. As we speak a great deal of Australian pubs are being bought out by a major supermarket chain.

An additional response to this question is that many Pubs in WA are already occupied by the ubiquitous PUB TABS which well and truly push out any other forms of entertainment that might be on offer. I am not really sure how anyone could say that those places are preferable to pokies, but I may be biased here because I really can’t stand horse or dog racing.

Nevertheless, I would like to see a study that compares the amount spent on off-track betting in WA compared to other states, I have a feeling that it well and truly takes up the slack for our lack of pokies.

Anyway, this post is a work in progress and may be added to or edited as I think of more things about pokies in particular or gambling in general. Feel free to add your own thoughts or questions in the comments.

26 Comments on “Points On Pokies”

‘Nevertheless, I would like to see a study that compares the amount spent on off-track betting in WA compared to other states, I have a feeling that it well and truly takes up the slack for our lack of pokies’.

I think it doesn’t compensate – overall levels of gambling in WA are about half the national average. Australian Gambling Statistics 2006.

Couldn’t agree more on Australian service levels – but giving this as a reason Eastern state pubs install pokies is a red herring. They do it because it is profitable, simple as that. When I lived in Melbourne, the Tattersalls used to be the cheapest place to drink, if I remember $1.50 pots (middies) in 1998, but dead as a door nail in terms of atmosphere. Drink driving laws have bit into suburban pubs severely over the last 20 years, such that pokies are one of the few ways for the local pub to stay viable. they’re still shit holes. Living in London now, so have to put up with the ubiquitous fruit machine sitting in the corner of almost every pub, including the more up market joints.

Licensed gambling is basically state protection for existing stakeholders and is inherently unappealing. It does the punter no good, and won’t stop destructive behaviour, from gambling addiction, to leaving your kid parked in a car outside the cacca. Eliminate state protection for the Packer family now!

It is interesting that large supermarket chains are buying out pubs.
Perhaps they will include a small Coles Express at our local Tatts so the old boys can buy the paper in the morning and then a can of baked beans in the afternoon and blow the rest of their pension cheque on the pokies.
Keeps them off the streets at least.
Sam you will be pleased to know that Collingwood has just bought the rather trendy Beach Hotel in Albert Park.
I guess it will enable the likes of Tazz and Ben Johnson to get drunk and beat up who they like on company owned premises.
Eddie really is everywhere.. even at my local.

The situation there sounds similar to Adelaide before pubs were allowed to have pokies. I preferred that setup, because if you wanted to play pokies, you still could, but the level of gambling addiction was a lot lower. Even as a hardcore libertarian, you should be careful of supporting liberalisation. You are in an unholy alliance with any government who wants to liberalise, as they only reason they are tolerating the idea is that they make shitloads from taxing machine profits. In other words, the practical effect of liberalisation is not to let people play pokies if they want to (they already can) but to license the government to impose a massive, extremely regressive tax, which they will then spend on arts grants or something.

I wouldn’t mind if the government funded the arts from gambling revenue – you can choose not to gamble if you don’t want to fund it.

Funny. Linking taxes to spending is a furphy, and even if it wasn’t, you’re saying peolpe should be effectively forced to pay for arts funding if they like a flutter, and if they don’t like it, they shouldn’t gamble. Was all your education multiple choice?

harry’s stats are kind of disturbing. average turnover for a queenslander was $7,000 but average loss was $1003. that’s like 14% HA. what crazy games are people playing. 🙂 i’m guessing a lot of this is from pokies and high HA sports bets. i wonder if increased competition and less predation from the tax man would lead to a better deal for punters.

Occassionally I take a phone call from a pumped up young journalist who wants a quote on “problem gambling” or similar theme.

At first I was quite guarded, unconvincingly stuttering a few pathetic watery points about the responsible service of gaming rules.

Nowdays I don’t much around, I boom to the greenhorn journalist that they should phone a newsagent: in the mystified silence which follows I point out that if playing a poker machine the gambling is carried out in an environment in which minors are fiercely unwelcome, and one has a very good chance of a win of some sort (albiet usually a form of loss mitigation, rather than jackpot win).

Newsagents however, offer gambling products for which the chances of winning are as remote as the chance of being struck by lightning: endless scratchies, lotto etc, often sold by unsupervised teenagers, with little controls to prevent minors making gambling purchases, all in full public view of the street, sometimes in open kiosks in shopping malls…. etc etc etc…

About here the greenhorn journalist realises they have been “had” on this issue. Deprived of fodder for their “story” in the form of a killer quote from a publican, the story, unable to be a hatchet job on pubs, mutates NOT into a hatchet job on newsagents, but into a bland bit of waffle about the good works the salvos or somesuch do among the community of problem gamblers.

I can agree with you, Sam, on the price of getting sozzled. I regularly pass on tidbits to mates back in WA such as the availability of 11.6% beers (about €1.30 for a 500ml can – that’s less than $2 aussie – or on special for 4 for €3.50) and specials at the local supermarket (this week it is buy two cartons of full strength beer (4.6%) and get one free – total charge is a touch over €13 or less than $20 aussie dollars.

It helps that everyone – corner store, supermarket, wine shop, whatever – is allowed to sell alcohol. Competition is good for keeping prices down. It also helps the consumer out as I do not have to worry about the local bottlo shutting on a Saturday night at some ridiculously early hour, particularly in summer (as I experienced during a Christmas stop in Perth last year).

In my city (Lyon) it is possible to buy alcohol cheaply in a bar or nightclub pretty much round the clock, except Sunday nights – though I am sure there would be somewhere open if I bothered to look for it. The beer is cheap, the spirits are not too badly priced and the bar staff are beaut to boot.

For really cheap drinking, however, you have to head east. I was in Romania a couple of months ago and me and four mates put the equivalent of about $80 on the bar at a nightclub (everything was pre-paid – very efficient). We started at about 9pm and danced and drank until about 3am when we all started getting tired. Despite having had a drink in my hand almost the entire night (the others too) we still had more than half of the money resting un-spent. As it was all pre-paid and we wouldn’t be getting it back anyhow, we blew the rest on the three best bottles of champers we could find in the place and left the rest as a tip (about $10 worth).

I tried the Blackjack on http://www.betsx.com and it seems it was returning much more than 1% stated above. I don’t know whether they got something wrong that night or it was just me. What are your thought on this.

The arrogance of Burswood in its approach to, well, everything, never ceases to amaze me. Because they are protected by legislation and government, and know that they’ll NEVER get the licence pulled (thanks to the taxation money brought in from the place on a profit of at least $1m a day), they pretty much do what they want.

Of the profits brought in, 70% are from electronic gaming, only 30% from tables! The overheads for running several hundred sets of electronic gaming machines are far cheaper than running a far smaller number of tables, since you don’t have to pay for several croupiers per table (breaks and to keep it open 24 hours), penalty rates for those croups, an Inspector, Pit Boss etc. Am pretty sure that if they could turn it into an all-electronic Main Gaming Floor, they would, keeping tables only for Pearl Room high-rollers.

As for yelling at the ferals in the Two-Up ring and not getting thrown out: depends which guard is walking past at that moment. That said, they’re so short staffed at the moment you’d be likely to have even one on the floor, and their policy dictates there be at least three before they get rid of someone! For a nice long rant about the state of Security at that place, have a read of my blog: http://securityofficer.blogspot.com – in short, the place is becoming increasingly feral with no signs of recovery, there aren’t enough guards to stay on top of things, guards are regularly assaulted, they don’t back up their staff then wonder why nobody wants to work for them anymore!

You have obviously spent a lot of time and effort in putting this article together. I enjoy playing pokies but I didn’t realise that it pushes out other forms of entertainment. Maybe I should stop playing as much.

I think generally Australian casinos have fallen to the dogs. I recall Crown used to have a dress code – least when Lloyd Williams ran the show it did. Not sure if Jupiter’s on the Gold Coast still enforces a dress code after 6pm. Then again it IS QLD so anything is possible I guess.

If I ever go to a casino these days it’s after the ferals have gone home. I’ve found by 3am it’s likely they’ve done their dough.

At least then I can play in relative peace and without having to sit next to some smelly, loud mouth buffoon, who should be returned to the shop for re-tooling.

These days I much rather gamble online. The pokies for instance pay-out a far better overall percentage return. Although there is no cage, I get my winnings wired to my account within 48 hours. Actually much better as the temptation to try lady luck further is removed.

Certainly an interesting take on the pokie culture in Australia. You raise some interesting if slightly controversial points. I now understand why I’m very rarely served by an Aussie in a pub! Agree with your point about Perth being the most expensive place in Australia to get drunk in. Now I know why – because they don’t have pokie machines?

That’s why Perth has a disgusting CRYSTAL METH epidemic ATM cause adults that put their money aside are bored (in my opinion). Gambling/pokies is not illegal maybe if there was one more venue in Western Australia licensed to have responsible gambling there might be a bit more competion, why would burswood cas feel the need to care or activly have better machines put in to its venue for its patrons and guests for higher and regular pay outs whether there big or small wins